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Just like the birds that fly south for the winter, it’s just about that time of year when northerners consider extending their winter vacation trips to sunny Florida, and potentially making Florida their “permanent” home. In addition to offering a tropical winter climate, snowbirds are attracted to Florida for its favorable tax and asset protection laws. Because Florida does not impose a state income tax, many consider changing their state residency to avoid their own states’ income tax. But Florida’s weather is just as brutal in the summer as Ohio can be in the winter, so many don’t want to part with their summer home. In an effort to take advantage of Florida’s tax benefits, but yet maintain their northern homes, some folks believe that simply spending six months and one day in Florida will suffice. Both Florida and these other income-imposing states, though, are cracking down on residency requirements.

In particular, people who maintain residences in both Florida and income-taxing states such as Ohio and Michigan need to be mindful of both Florida residency requirements and their own states’ definition of residency. In Ohio, for example, an individual is presumed not to be domiciled if the person: (a) has no more than 212 “contact periods” (i.e., an overnight stay in Ohio), which need not be consecutive, (b) has at least one residence outside of the state, and (c) files with the tax commissioner an affidavit stating that the individual was not domiciled in Ohio. That said, even if an individual meets these three requirements, facts and circumstances under common law may overrule an individual’s asserted domicile if, for example, a taxpayer maintains an Ohio driver’s license, votes in Ohio and claims homestead in Ohio, as determined by a recent Ohio Supreme Court case.

Things to consider in establishing residency which may be scrutinized by a taxing authority include:

  • Where do you earn your income?
  • Where are the majority of your cars registered?
  • Where do you vote?
  • Are you still primarily active in community, social and income producing activities of the tax imposing state?

Ultimately, establishing Florida residency may be a “facts and circumstances” test, so you should be able to evidence as many ties to Florida as possible.

Some suggested action items to consider when establishing residency in Florida include:

  • Establish your principal residence in Florida
  • File a “Declaration of Domicile” showing that you residence and maintain a residence in a Florida county
  • Register to vote in Florida
  • Obtain a Florida driver’s license
  • Register all cars, bank accounts and other legal documentation in Florida
  • Establish religious and social relationships in Florida
  • Keep a travel journal and copies of travel documentation to evidence the number of days you spent in Florida and elsewhere
  • List your Florida residence on your passport

As establishing residency in Florida can be tricky, make sure to consult with your tax professional or attorney.

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